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How Managers Should Respond When Bribes Are Business as Usual

Fri, 11/16/2018 - 18:00
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Corporate bribery—that is, the practice of companies paying government officials for preferential treatment—is not only illegal  in dozens of countries. Studies show that it’s also counterproductive resulting in lower profit margins, return on equity, and employee morale; costly delays as players haggle over the size of the kickback; and poverty and poor governance in the markets where they’re paid. Yet, according to the World Bank, roughly one-third of firms around the world use kickbacks, paying an estimated total of $400 billion a year. Since 2006, hundreds of companies — including global brands like Novartis, Hewlett-Packard, and Rolls Royce — have reached settlements with U.S. authorities on charges of overseas bribery.

Why do kickbacks continue? According to my own research into dozens of bribery cases and five years of reporting on four continents, it’s because executives believe that  their competitors are using bribery as a tool to get ahead, so they must, too. “[Bribes] are like steroids,” one oil consultant told me. “Everybody’s doing it, and if you don’t do it, you fall behind.”

Of course, copying what your competitors do—especially when it is illegal and inefficient – is the opposite of innovative. How can companies kick this habit? After surveying corruption experts and business executives (including one who went to jail for bribery) I identified four strategies:

Have a resistance plan for bribe demands.  Managers on the ground should be prepared with the following line: “I can’t give you a bribe, but I can do this, this and this, for you,” says Kent Kedl, the senior partner for Greater China and North Asia at Control Risks. The key is to better understand what motivates the official seeking the backhander. More often than not, Kedl explains, the bribe is not about money; it’s about that person wanting to feel respected. “We tell companies, ‘What’s another way to give them some respect, to have them be a key opinion leader for you?’” One way is to offer the person or his or her staff members a chance to participate in high-level discussions about the company’s commitment to the local community and to give that office a greater voice in shaping those decisions. Another is to offer to create more jobs or provide more training or technical service than your competitors are offering. You can highlight the lasting legacy you want to help the official create and promise to publicly highlight his or her involvement.

Build the cost of avoiding bribery into your business projections. Bribing government officials has costs. But saying no can be expensive too: from delays in delivery (the customs official refuses to release goods at the border until he gets a kickback) to failing to win a contract outright (the minister who expects his 10% cut of a procurement contract). Firms should calculate these costs into their business plan, says Frederick Davidson, the CEO of Energold Drilling. He provides an example: “What we normally run into is in customs. A lot of these countries pile rule upon rule upon rule. If you’re one of the locals, you have to pay somebody off and you skip all the rules. We don’t anticipate doing that. So, we build into any bid additional brokerage costs, legal costs, etc. You can easily add 10 to 20 percent. Let’s say you’re talking a $300,000 contract. You would factor $30,000 to $60,000 in certain places just to address the bureaucracy that they put in place.”

Companies should also explain to investors that, rather than ratcheting up their quarterly forecasts, they are smoothing them out to account for delays in avoiding kickbacks, adds Richard Bistrong, who went to jail for paying bribes around the world and now heads an anti-bribery consulting firm. He offers an example of how to present this: “Our normal expected return in a particular region is 18-24 months, and we believe that is attainable, but we’re projecting 24-36 months to achieve those objectives in a way that is sustainable and ethical.”

Identify “moon markets” and walk away. Some markets—for example, several in China—are too rife with bribery to get around it, and no amount of innovation can change that reality. Kedl therefore advises  companies to treat these markets are as if they were on the moon (that is, inaccessible) and reset their ambitions accordingly. This may mean a contraction in profits in the short-term, but in the long run it also means building a more resilient company, with consistent growth year after year. “And that’s what companies in challenging markets need to be thinking about,” he adds.

As a corollary to this, firms may need to invest in gathering the intelligence to identify moon markets, and other costs associated with avoiding bribery. Coca-Cola, for example, uses data from Transparency International to build a map of its bribery risks in various markets each year, and then determines where to focus its anti-corruption efforts.

Recalibrate performance-based targets and compensation relative to high risk. In markets with high corruption risk, front-line employees have little incentive to refuse a proposed kickback if it means failing to make their quota and risking a significant portion of their compensation. Salespeople shouldn’t receive “a financial haircut” for saying no to corruption, Bistrong says. One best practice he highlights?  The creation of an annual bonus pool for these sorts of situations. “Let’s say a foreign official is demanding a bribe. When the front-line salesperson raises the possibility that the bribe demand may cause delays, management will actually pay any accrued bonus as if the sale had been completed, drawn from the bonus pool. At that point, everybody will lean in together to fix that problem in an ethical and compliant manner, even if it takes considerably longer,” Bistrong says. “That’s enlightened management.”

By 2016 , after Novartis and GlaxoSmithKline paid multi-million-dollar fines  following investigations of their alleged bribery around the world, both companies shifted the way their sales teams operate. GlaxoSmithKline did away with sales targets, CNN reported,   and now rewards reps based on their knowledge of the needs of patients and doctors. Novartis capped its performance-based compensation at 35% andreps are rated from 1 to 3 based on their values and behavior, not a quota; receiving a bonus requires scoring higher than a 1, according to Reuters.

In today’s world, a company that creates state-of-the-art products, and devises state-of-the-art strategies to sell them without bribes is not only innovative, but disruptive, helping to dismantle a centuries-old system that perpetuates poverty abroad and stifles creativity within.

The Benefits of Laughing in the Office

Fri, 11/16/2018 - 17:00
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While on an investor tour in Europe, I ended a busy day by joining my boss at a nice restaurant. After he said something funny, I responded in my typical style — throwing back my head and letting out hearty, unabashed laughter. People were taken aback. They turned to stare at me.

I asked my red-faced boss whether my laughter had embarrassed him. “It is pretty loud,” he muttered under his breath.

Later that evening, I castigated myself. I lay awake, wondering how many other times my laugh might have caused discomfort in professional situations. Should I try to mute it? Should I give up my executive position and transfer back to sales, which had a more jovial atmosphere? Should I find a new job?

By sunrise, I made a decision: I loved to laugh. I’d keep it and my job. I’d stay true to my authentic self.

It worked out. Now that I was conscious of my laugh, I looked out for what impact it had. I discovered that it did not impede my advancements. In fact, it became part of my signature. When I returned from vacations, colleagues told me they’d missed it.

Our offices had needed a good dose of laughter. And my decision not to rein it in helped. It was something people looked forward to each day.

It turns out that a series of studies shows the positive impact humor can have in the office. “According to research from institutions as serious as Wharton, MIT, and London Business School, every chuckle or guffaw brings with it a host of business benefits,” writes Alison Beard in the HBR article, “Leading with Humor.” “Laughter relieves stress and boredom, boosts engagement and well-being, and spurs not only creativity and collaboration but also analytic precision and productivity.” Harvard Business School professor Alison Wood Brooks has also found that cracking jokes at work can make people seem more competent.

What about being on the receiving end of a joke, and laughing heartily? That too can bring a world of benefits to your employees. “When you start to laugh, it doesn’t just lighten your load mentally, it actually induces physical changes in your body,” the Mayo Clinic explains. It enhances your intake of “oxygen-rich air,” increasing your brain’s release of endorphins. It “can also stimulate circulation and aid muscle relaxation, both of which can help reduce some of the physical symptoms of stress.”

The Mayo Clinic even praises a howl like mine. “A rollicking laugh fires up and then cools down your stress response, and it can increase your heart rate and blood pressure. The result? A good, relaxed feeling.”

Given all the research showing that lower stress benefits employees and reduces absenteeism, the freedom to laugh seems not just good, but necessary at work. A group of researchers even found that after watching a comedy clip, employees were 10% more productive than their counterparts.

Of course, there can be downsides to too much humor — or too much laughter. For example, leaders who tease staff members or tell dirty jokes can pave the way for other employees to behave badly. And Harvard Business School professor Rosabeth Moss Kanter notes that numerical minorities in professional situations, such as a woman with a group of men, may feel pressured to laugh at jokes that demean the minority. “The price of that kind of acceptance is decreased respect for everyone in” the minority category, she says.

But within the bounds of decency, laughter on the whole is a good thing, and the benefits far outweigh the risks.

My advice: Let your laugh fly free. Not all day, every day of course. It’s always good to be conscious of the volume within your environment, and to avoid distracting colleagues. But as Harvard Medical School professor Carl Marci notes, “Laughter is a social signal among humans. It’s like a punctuation mark.”

Sometimes in the midst of a stressful day, it’s helpful to be the exclamation point.

For Better Retail Promotions, Ask These Questions

Fri, 11/16/2018 - 16:00
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Discounts and promotions are at an all-time high, often comprising the single-biggest cost within many retailers’ P&Ls. Yet despite these high stakes, and the growing adoption of sophisticated analytics, many retailers continue to take a broad-brush approach to running promotions that results in missed sales and profits.

The most common explanation for this lack of precision is that retailers tend to evaluate promotions at a high level, without drilling down to understand the impact of individual tactics within each promotion. By this, we mean they compare the overall event to last year’s promotion in aggregate without understanding how different parts of the promotion might be more or less successful; getting the mix right is the key to creating more impact on sales and profits.

The good news is that many large retail organizations already have the tools and data they need to craft more effective promotions. What they lack, more often than not, is a logical way to structure their promotional effectiveness analysis. The solution can be found by asking a series of strategic questions, then carefully parsing the data for the answers.

When are discounts most likely to stimulate a sufficient sales response?

Promotions vary in effectiveness depending on the time of the year, key holidays, and even the day of the week. Retailers who have a firm grasp of how their customers shop during different periods can use this information to formulate more precise promotional strategies. For example, during certain holidays — Christmas, Valentine’s Day, Mother’s Day, etc. — consumers tend to be in active shopping mode, and retailers should structure their promotions accordingly. Recent analysis for a leading apparel retailer showed elasticity of customer response to promotional discounts was up to three times higher during holiday periods than during non-holiday periods and two times higher during weekends than on weekdays. Given this, you’re almost certainly throwing away sales and margin dollars by not tailoring your promotions to time periods.

Furthermore, retailers should use this insight to educate themselves on when aggressive promotions are a waste of effort and valuable margin dollars. If your typical customers have traditional work weeks, it’s very difficult to entice them into the store for an unplanned purchase during the week, regardless of the type of promotion. Therefore, rather than trying to use steep promotions to drive traffic on weekdays, use more strategic promotions to encourage consumers who are actually in the store during the week to fill their baskets.

Does the promotion work best in-store or online?

It’s important to structure promotions based on what works best for a particular channel. Our recent work in women’s fashion suggests more complicated promotional structures aimed at basket-building — such as buy one item and get a second at a discount — work far better in-store. Simpler promotional structures — such as an off-the-top 20% discount — tend to yield better results online.

What products are most likely to garner more response when promoted?      

Not all items a retailer sells are created equal. Some have higher elasticities or stronger pricing power. Certain items that are on promotion will be especially effective in driving traffic, while others are better used as basket or margin-builders. For example, our analysis in the men’s apparel category shows that, compared with everyday basics, promotions for in-season fashion items bring significantly more people into stores. The same is true for lower-ticket sub-brands and product lines at aggressive price points.

At the same time, retailers need to be aware of the signals they send to consumers when deciding which items to promote and how often. Understanding which are your strongest or marquee items, brands, and product lines is essential, because you could easily erode their value by over-promoting them. Promoting too frequently may cause consumers to equate your brand with low prices, which is probably not the profile you want to communicate unless you’re a low-cost retailer.

How does response vary across tactics (discount depths and promotion structure)?

Promotions comprise a rich set of tools, and it’s no longer enough to just pull out a hammer every time there’s something that needs doing. Instead, match the tool to the job, making sure your promotional structure is aligned to your desired outcome and the manner in which your customers shop. For instance, if you’re trying to build basket size, more complex, tiered promotions — such as giving increasing discounts for each subsequent item purchased — may be a better way to go. Co-promoting the right items across the store, and knowing which promotional levels are too deep or not deep enough, will further help drive sales and improve profits.

Who is most likely to respond (e.g., new versus existing customer groups)?

Most retailers have a vision that a customized promotions strategy — one that optimizes promotions for every consumer — is the future. But for major marketed promotions, that’s not always achievable or practical. Nevertheless, you need to make sure that your efforts target your most important customers who can ‘move the needle’ — either those who drive the most sales or the ones who are the most profitable. Companies now have the data and analytic power to create specific customer profiles at relevant group levels — for example, loyalty members or top customers, or those who tend to purchase on certain occasions or within certain categories — and craft promotional offers tailored specifically to these groups.

Getting promotions right

Savvy retailers now have the tools to build their promotional calendars from the bottom up, eliminating wasted promotional dollars and moving from scattershot decision-making to effective actions tied to strategic objectives (e.g., driving traffic, building basket, driving sales and profit). Our experience suggests that retailers can find roughly 400 to 700 basis points of incremental margin dollars by deconstructing and deploying promotions that are strategically designed, targeted, and timed.

Of course, the most effective promotional strategy will differ for each retailer, and must account for many things, including the intended value proposition, competitive position and pricing power, and the specific consumer segments served. But through data science and a careful, strategic approach, retailers can solve the promotional Rubik’s Cube and unlock substantial value.

How to Work for a Boss Who Has a New Idea Every 5 Minutes

Fri, 11/16/2018 - 15:05
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You walk down the hall, head spinning — unsure of how to stabilize yourself.

You went into your one-on-one thinking you had clarity on your current priorities. You just left it wondering how in the world you would squeeze in the five new ideas your boss just dreamed up. You cringe when you have the premonition that an email with the subject line “another thought” might be waiting for you once you reach your desk.

Visionary bosses can be exciting, fun, and innovative. They can also feel overwhelming when there’s no way that you can keep up with all of their creative ideas.

As a time management coach, I’ve coached many creative idea people and coached many people managed by creative idea people. Based on that experience, here are some helpful strategies for managing up when your boss gets distracted by too many creative ideas.

Foster Mutual Respect

If you find yourself overwhelmed by your boss’s creative ideas, most likely you are more of an action-oriented person. If you’re not careful, you can start to develop a judgmental attitude such as, “I’m the only one who gets anything done and contributes value around here.” And this attitude can cause you to lose respect for the insight that your boss brings.

Avoid that trap and instead choose to focus on mutual respect. It may be true that you’re better at executing on tasks, which is a strength that you bring to the table. It also may be true that your boss is better at helping determine what should be done and keeping the team from getting stale. Instead of seeing the differences as bad, it’s most helpful to look at them as complementary assets you both bring to the team.

Recognize Not All Ideas Require Action

If you’re a very action-focused person, you may automatically assume that when your boss shares an idea that she expects you to do something about it. But often that’s not the case. Individuals with creative minds can think of 100 new ideas before breakfast. There’s no possible way that they — or anyone — could keep up with them.

Some of my coaching clients have found the best solution is to keep an email folder or another “parking lot” of ideas that their bosses come up with that aren’t related to current projects and priorities. They might say something in a meeting like, “That’s a great idea,” or send an email reply saying, “I’ll take a look.” Then add the idea to the parking lot without feeling compelled to take any further action.

Often times your boss just wants to share something that’s on her mind and is satisfied with acknowledgement of the idea. The general rule in these situations is that you wait until the idea is brought up a few more times before doing anything, otherwise you can just let it sit. (Of note, this may not work in all situations so be aware of your boss’s expectations. If she expects every idea be pursued, you’ll need to use the expectation negotiation strategies below.) But this parking lot strategy does work in many cases without any substantial consequence.

Explain the Time Commitment

Individuals with a bent toward the creative often have difficulty estimating how long activities will take. If you find that your boss seriously wants to pursue a new idea but that it would take a substantial amount of hours, help her understand the cost. For example you could lay out that it will take 20 hours of staff time and 15 hours of contractor time to follow through on the idea. Is she comfortable with that allocation of hours and budget?

When you detail out the time commitment, at first your boss may be shocked because she assumed it took much less time. And then she’ll likely say, “Oh, never mind. It’s not that important.” By explaining the cost, it takes the pressure off of you to make things work and on to her to give the idea the resources it needs.

Come Back to the Plan

If your boss tends to get distracted with new ideas, she likely has difficulty setting priorities. Instead of shutting down an idea that she’s excited about implementing, re-direct your attention back to the team’s monthly or quarterly plan. Ask questions such as: How do you see this new idea fitting in with our current goals? If we take on this new initiative, we will need to drop or delay another, which one would you be willing to de-prioritize? Is this idea something that we need to implement now or could it be considered for next year?

By laying out how pursuing a new idea will have an impact on other priorities, you can help your boss assess what makes the most sense from a strategic perspective.

Working with a boss who has a constant flow of creative ideas can be stimulating — or debilitating. By using these four strategies, you can leverage your boss’s creative strengths while minimizing the stress and frustration of trying to keep up.

Dysfunctional Teams

Thu, 11/15/2018 - 23:23

Is your teamwork not working? In this episode of HBR’s advice podcast, Dear HBR:, cohosts Alison Beard and Dan McGinn answer your questions with the help of Amy Edmondson, a professor at Harvard Business School and the author of The Fearless Organization: Creating Psychological Safety in the Workplace for Learning, Innovation, and Growth. They talk through what to do when your team isn’t communicating, doesn’t respect its leader, or has one employee who’s causing problems.

Download this podcast

Listen to more episodes and find out how to subscribe on the Dear HBR: page. Email your questions about your workplace dilemmas to Dan and Alison at dearhbr@hbr.org

From Alison and Dan’s reading list for this episode:

HBR: The Three Pillars of a Teaming Culture by Amy Edmondson — “When you join an unfamiliar team or start a challenging new project, self-protection is a natural ins tinct. It’s not possible to look good or be right all the time when collaborating on an endeavor with uncertain outcomes. But when you’re concerned about yourself, you tend to be less interested in others, less passionate about your shared cause, and unable to understand different points of view. So it takes conscious work to shift the culture.”

HBR: Too Much Team Harmony Can Kill Creativity by Darko Lovric and Tomas Chamorro-Premuzic — “Consistent with these famous case studies, scientific research shows that creativity and innovation can be enhanced by reducing team harmony. For instance, a recent study of 100 product development teams found that two common disruptors of team harmony, namely diversity and task uncertainty, were positively associated with creative performance.”

HBR: Eight Ways to Build Collaborative Teams by Lynda Gratton and Tamara J. Erickson — “Our study showed that a number of skills were crucial: appreciating others, being able to engage in purposeful conversations, productively and creatively resolving conflicts, and program management. By training employees in those areas, a company’s human resources or corporate learning department can make an important difference in team performance.”

HBR: The Secrets of Great Teamwork by Martine Haas and Mark Mortensen — “Team assignments should be designed with equal care. Not every task has to be highly creative or inspiring; many require a certain amount of drudgery. But leaders can make any task more motivating by ensuring that the team is responsible for a significant piece of work from beginning to end, that the team members have a lot of autonomy in managing that work, and that the team receives performance feedback on it.”

Health Systems Need to Completely Reassess How They Manage Costs

Thu, 11/15/2018 - 18:06
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A recent Navigant survey found that U.S. hospitals and health systems experienced an average 39% reduction in their operating margins from 2015 to 2017. This was because their expenses grew faster than their revenues, despite cost-cutting initiatives. As I speak with industry executives, a common refrain is “I’ve done all the easy stuff.” Clearly, more is needed. Cost reduction requires an honest and thorough reassessment of everything the health system does and ultimately, a change in the organization’s operating culture.

When people talk about having done “the easy stuff,” they mean they haven’t filled vacant positions and have eliminated some corporate staff, frozen or cut travel and board education, frozen capital spending and consulting, postponed upgrades of their IT infrastructure, and, in some cases, launched buyouts for the older members of their workforces, hoping to reduce their benefits costs.

These actions certainly save money, but typically less than 5% of their total expense base. They also do not represent sustainable, long-term change. Here are some examples of what will be required to change the operating culture:

Contract rationalization. Contracted services account for significant fractions of all hospitals’ operating expenses. The sheer sprawl of these outsourced services is bewildering, even at medium-size organizations: housekeeping, food services, materials management, IT, and clinical staffing, including temporary nursing and also physician coverage for the ER, ICU and hospitalists. More recently, it has come in the form of the swarms of “apps” sold to individual departments to solve scheduling and care-coordination problems and to “bond” with “consumers.” There is great dispersion of responsibility for signing and supervising these contracts, and there is often an unmanaged gap between promise and performance.

An investor-owned hospital executive whose company had acquired major nonprofit health care enterprises compared the proliferation of contracts to the growth of barnacles on the bottom of a freighter. One of his company’s first transition actions after the closure of an acquisition is to put its new entity in “drydock” and scrape them off (i.e., cancel or rebid them). Contractors offer millions in concessions to keep the contracts, he said. Barnacle removal is a key element of serious cost control. For the contracts that remain, and also consulting contracts that are typically of shorter duration, there should be an explicit target return on investment, and the contractor should bear some financial risk for achieving that return. The clinical-services contracts for coverage of hospital units such as the ER and ICU are a special problem, which I’ll discuss below.

Eliminating layers of management. One thing that distinguishes the typical nonprofit from a comparably-sized investor-owned hospital is the number of layers of management. Investor-owned hospitals rarely have more than three or four layers of supervision between the nurse that touches patients and the CEO. In some larger nonprofit hospitals, there may be six. The middle layers spend their entire days in meetings or on conference calls, traveling to meetings outside the hospital, or negotiating contracts with vendors.

In large nonprofit multi-hospital systems, there is an additional problem: Which decisions should be made at the hospital, multi-facility regional, and corporate levels are poorly defined, and as a consequence, there is costly functional overlap. This results in “title bloat” (e.g., “CFOs” that don’t manage investments and negotiate payer or supply contracts but merely supervise revenue cycle activities, do budgeting, etc.). One large nonprofit system that has been struggling with its costs had a “president of strategy,” prima facie evidence of a serious culture problem!

Since direct caregivers are often alienated from corporate bureaucracy, reducing the number of layers that separate clinicians from leadership — reducing the ratio of meeting goers to caregivers — is not only a promising source of operating savings but also a way of letting some sunshine and senior-management attention reach the factory floor.

However, doing this with blanket eliminations of layers carries a risk: inadvertently pruning away the next generation of leadership talent. To avoid this danger requires a discerning talent-management capacity in the human resources department.

Pruning the portfolio of facilities and services. Many current health enterprises are combinations of individual facilities that, over time, found it convenient or essential to their survival to combine into multi-hospital systems. Roughly two-thirds of all hospitals are part of these systems. Yet whether economies of scale truly exist in hospital operations remains questionable. Modest reductions in the cost of borrowing and in supply costs achieved in mergers are often washed out by higher executive compensation, more layers of management, and information technology outlays, leading to higher, rather than lower, operating expenses.

A key question that must be addressed by a larger system is how many facilities that could not have survived on their own can it manage without damaging its financial position?  As the U.S. savings and loan industry crisis in the 1980s and 1990s showed us, enough marginal franchises added to a healthy portfolio can swamp the enterprise. In my view, this factor — a larger-than-sustainable number of marginal hospital franchises — may have contributed to the disproportionate negative operating performance of many multi-regional Catholic health systems from 2015 to 2017.

In addition to this problem, many regional systems are comprised of multiple hospitals that serve overlapping geographies continue to support multiple, competing, and underutilized clinical programs (e.g., obstetrics, orthopedics, cardiac care) that could benefit from consolidation. In larger facilities, there is often an astonishing proliferation of special care units, ICUs, and quasi-ICUs that are expensive to staff and have high fixed cost profiles.

Rationalizing clinical service lines, reducing duplication, and consolidating special care units is another major cost-reduction opportunity, which, in turn, makes possible reductions in clinical and support personnel. The political costs and disruption involved in getting clinicians to collaborate successfully across facilities sometimes causes leaders to postpone addressing the duplication and results in sub-optimal performance.

Clinical staffing and variation. It is essential to address how the health system manages its clinicians, particularly physicians. This has been an area of explosive cost growth in the past 15 years as the number of physicians employed by hospitals has nearly doubled. In addition to paying physicians the salaries stipulated in their contracts, hospitals have been augmenting their compensation (e.g., by paying them extra for part-time administrative work and being on call after hours and by giving them dividends from joint ventures in areas such as imaging and outpatient surgery where the hospital bears most of the risk).

The growth of these costs rivals those of specialty pharmaceuticals and the maintenance and updating of electronic health record systems. Fixing this problem is politically challenging because it involves reducing physician numbers, physician incomes, or both. As physician employment contracts come up for renewal, health systems will have to ask the “why are we in this business” and “what can we legitimately afford to pay” questions about each one of them. Sustaining losses based on hazy visions of “integration” or unproven theories about employment leading to clinical discipline can no longer be justified.

But this is not the deepest layer of avoidable physician-related cost. As I discussed in this HBR article, hospitals’ losses from treating Medicare patients are soaring because the cost of treating Medicare patient admission is effectively uncontrolled while the Medicare DRG payment is fixed and not growing at the rate of inflation. The result: hospitals lost $49 billion in 2016 treating Medicare patients, a number that’s surely higher now.

The root cause of these losses is a failure to “blueprint,” or create protocols for, routine patient care decisions, resulting in absurd variations in  the consumption of resources (operating room time; length of stay, particularly in the ICU; lab and imaging exams per admissions, etc.).

The fact that, hospitals have outsourced the staffing of the crucial resource-consuming units such as the ICU and ER makes this task more difficult. Patients need to flow through them efficiently or the hospital loses money, often in large amounts. How many of those contracts obligate the contractual caregivers to take responsibility for managing down the delivered cost of the DRG and reward them for doing so? Is compensation in these contracts contingent on the profit (or loss avoidance) impact of their clinical supervision?

These are all difficult issues, but until they are addressed, many health systems will continue to have suboptimal operating results. While I am not arguing that health systems abandon efforts to grow, unless those efforts are executed with strategic and operational discipline, financial performance will continue to suffer.  A colleague once said to me that when he hears about someone having picked all the low-hanging fruit, it is really a comment on his or her height. Given the escalating operating challenges many health systems face, it may be past time for senior management to find a ladder.

Why Public Health Organizations Should Partner with Academic Institutes - SPONSOR CONTENT FROM QATAR FOUNDATION

Thu, 11/15/2018 - 17:30


In a recent article, The Guardian newspaper called for the National Health Service to turn to universities as a key resource, arguing that the research ecosystem in the UK is fragmented and more partnerships that align expertise with the goal of improving public health are needed.

The recommendation was echoed in a recent U.S. research study, which observed that 30–40 percent of patients in the United States “do not receive care complying with current research evidence.” It suggested that collaboration in research, education, and clinical practice too often remain unexplored in many developed countries across the world.

A case study for what such collaboration can look like is the healthcare sector in Qatar. In a decade, it has advanced from being ranked 27th in the world to 13th, and now stands as the highest in the Middle East and North Africa region.

Education Doesn’t End With Graduation
Higher education plays a key role in advancing national and regional public health in Qatar since the work of developing and personalizing cutting-edge treatment interventions is firmly implanted in academic institutions.

Qatar Foundation (QF), a non-profit organization supporting Qatar’s development, works to ensure that education lends itself to practice in ways that make it inseparable from the process of diagnosis and treatment. For instance, Sidra Medicine, the country’s premier hospital for women and children, benefits from the academic scholarship of Weill Cornell Medicine-Qatar (WCM-Q), a medical university just across the street from its fellow QF entity, by having WCM-Q’s professors serve as physicians within its various departments. Sidra academicians, by the same token, hold faculty positions and professorships at WCM-Q, further boosting interprofessional training for medical students and professionals.

“Sidra is introducing innovative education and training programs for medical students, trainees, and physicians in various specialties, which has never been done in this region before,” said Dr. Muhammad Waqar Azeem, Chair of Psychiatry at Sidra and Professor of Psychiatry at WCM-Q. “Ultimately, our research is improving our interventions. It is not undertaken for the sake of research, but to improve people’s lives.”

Through such programs, QF ensures practicing doctors are equipped with the theoretical knowledge of academics that they might otherwise leave behind after their graduation.

 

Learning Environments Can Be Integrated
Sidra and WCM-Q are joined by specialized schools for children with autism and other learning challenges, all of which are part of a larger learning ecosystem built by QF—known as Education City— which features dozens of academic, research, and community centers. Located in a 3,000-acre campus, Education City benefits the national healthcare sector by ensuring that the results of research are swiftly translated into patient care.

Within this integrated learning environment, QF has also established the World Innovation Summit for Health (WISH), an initiative that gathers a global community of health experts, innovators, and policymakers to capture and transmit the best evidence-based ideas and practices in the health industry.

In 2016, WISH published a report titled ‘Autism: A Global Framework for Action’—compiled by 11 thought-leaders from five continents—that emerged through this unique ecosystem.

“One day, while having breakfast with the then-CEO of WISH, he asked me how we could address autism for the 2016 WISH summit,” said Dr. Azeem, who then organized a panel of specialists in this area to explore the possibilities of this project. The result of this association was an evidence-based report recommending best practices in autism services for developing and middle-income countries. “In less than one year, we were able to see an idea born out of a breakfast meeting come to life,” he said.

The example illustrates how cross-functional work between various health-related organizations ensures that innovation is not bogged down by the bureaucracies that often accompany formal partnerships. As Dr. Azeem’s experience shows, projects in Education City capable of setting local and international standards can begin with a simple meeting with an entity next door.

Stakeholders Can Help Address Industry Gaps
In a typical university-hospital association, one party takes the initiative and offers incentives to the other to enter into a mutually beneficial pact. In Qatar, however, QF acts as the driving force for bringing different organizations to the table, pushing them to use their expertise to fill existing gaps in the health system.

“Many countries take for granted the potential of having all stakeholders around the table, mainly because, for some, this can be very hard to do,” said Dr. Azeem. “Due to the size, resources, and commitment available in Qatar, what can be achieved in the US at the state level can be accomplished here at the national level.”

A key example of this is Qatar’s National Autism Plan. Since the Ministry of Public Health launched the plan in 2017, Dr. Azeem has been instrumental in foregrounding the benefits of involving stakeholders from the private and public sector.

“Qatar is the only country that has such a plan in the whole region,” he explains. “It was only possible due to the support shown by the country’s top leadership, the presence of stakeholders from across the country on the table, and the active participation of families. Everyone involved met for about two years to put the plan together successfully.”

Sidra may have only opened its main hospital building earlier this year, but the medical network through which it interacts with other educational and research entities within QF is already bearing fruit. In October, Sidra performed the country’s first separation surgery of conjoined twins, paving the way for complex pediatric surgeries and eliminating the local need to travel abroad for rare and complex conditions. Sidra also ushered in an era of medical tourism in Qatar when a prematurely-born baby was flown to Qatar from Kuwait for an emergency operation to correct a heart defect, at just 29 days old.

Such examples outline how connecting hospitals with universities, and research institutes with public health centers, has all the signs of being the most efficient way forward for revolutionizing ailing healthcare systems around the world.

To learn more about Qatar Foundation and its various initiatives, visit www.qf.org.qa.

Survey: Remote Workers Are More Disengaged and More Likely to Quit

Thu, 11/15/2018 - 16:00
Andrea Comi/Getty Images

Employees around the world yearn for freedom and flexibility. The most common form of flexibility that companies offer is the ability to work remote. In a new study by my firm and Virgin Pulse, we found that a third of employees globally work remote always or very often. Compared to a decade ago, the number of remote workers has increased by 115%. I’ve personally worked from home for almost eight years and have benefitted from the independence, autonomy, and five-second commute time.

Despite these benefits, I often feel lonely, isolated, and less engaged with my team, since I rarely see them face-to-face and am confined to a 500-square-foot apartment. After interviewing over 2,000 employees and managers globally, our study discovered two-thirds of remote workers aren’t engaged and over a third never get any face-time with their team—yet over 40% said it would help build deeper relationships.

The study also found that remote workers are much less likely to stay at their company long-term. Only 5% always or very often see themselves working at their company for their entire career, compared to almost a third that never work remotely. When you don’t see or hear your colleagues over a long period of time, you can become less committed to your team and organization — and start looking for your next opportunity — since no one is looking over your shoulder while you job search.

While the population of remote workers is growing, some companies are simultaneously rolling back their remote work programs and forcing their employees to be at the office everyday with no exceptions. Companies that have already mandated this include Yahoo!, Best Buy, HP, Reddit, IBM, and Honeywell. They agree that in-person collaboration fosters teamwork, idea-sharing and quicker decision making. They believe that it’s the best way to build a strong culture, increase engagement, and fuel work relationships.

Kiah Erlich, Director, a senior director at Honeywell told me: “When our company eliminated working from home several months ago, it was disappointing and not fun as a manager to explain to some of my permanently remote employees. But as a leader who craves human interaction, it has been one of the greatest things we’ve done. People are actually in the office now. What once was a painful conference call is now a collaborative white-boarding session. Instead of more emails, people get out of their chair and walk over to my office. It is a beautiful thing to see, and it has not only improved productivity but brought the team closer together.” Leaders want their employees to have a similar experience has because it’s good for the culture and business.

Instead of saving money by promoting remote work, many companies are investing money in their office designs. A well-designed office, with an assortment of meeting spaces, gives employees the flexibility they desire but in a collaborative environment. Apple is spending about $5 billion for a 2.8 million square-foot office space that accommodates about 12,000 employees. Amazon will also spend $5 billion on their new headquarters to employ 50,000 people, and Zurich North America spent $333 million for a 783,000 square foot office for 3,000 employees. Clearly, design matters to these companies; they want a place where employees can freely interact to create breakthrough ideas.

These companies understand that employees’ proximity to each other matters. The closer we sit to our colleagues, the more likely we will interact with them and form the relationships that lead to long-term team commitment. Back in 1977, MIT Professor Thomas J. Allen studied the communication patterns among both scientists and engineers and found that the further apart their desks were, the less likely they were to communicate. If they were 30 meters or further from each other, the likelihood of regular communication was zero. Mike Maxwell, a senior category leader at Whirlpool, says: “Face-to-face meetings give you the proximity and presence that make collaboration more effective. I am also better able to read the room and pick up on the unsaid words. Reading the room is critical for knowing when things need further explaining or when to drop something that isn’t going over well.”

Aside from lacking proximity, there are often times a lag in communications with a remote workforce. Getting everyone on the same page, on the same call and in the same mindset is challenging when people aren’t located in the same place. “Whenever there’s a gap in communication across a remote and dispersed workforce, people fill that void with their own assumptions,” says Dr. Rajiv Kumar, president and chief medical officer at Virgin Pulse— assumptions that can result in work conflicts.

Although research shows that remote workers are more productive, and they’ll tell you that they enjoy the flexibility, they typically won’t reveal how isolated they are. Some companies have gone to extremes to either force everyone into the office or enable all employees to work remote, but very often, meeting in the middle is best. Give them the flexibility at the office, while an option to work remote part-time based on their position and needs. They need face-time even if they won’t admit it, and companies need an engaged workforce in order to retain talent and compete in the global economy.

How to Leave a Job You Love

Thu, 11/15/2018 - 15:05
Eduardo da Costa/Getty Images

Maybe you fell head over heels. Maybe your feelings grew over time. All you know is that you have what everyone is looking for, but few seem to get: A job you love. And you are about to leave it. How do you even start explaining?

The work is great. So is the organization. It’s not them. It’s you. And it was not just a moment of temptation. You have been thinking about it for a while. Even if you might regret it, you must part now. It’s the right time.

After all, you keep telling yourself, you’d better leave while it is your choice. When you still have options. You are too young to get cozy and too good to be taken for granted. You have seen what happens to those who do. One day, they get dumped unceremoniously, and what for, new talent? Or their love slowly curdles into complacency, leaving them going through the motions. No, you won’t let that happen, and ruin the memory of a great modern love.

Because that’s what it is, admit it. Sigmund Freud is often quoted saying, a century ago, that to live a good life we need to be able to love and work. These days, it seems, we must be able to love to work. We no longer want just respect, security, or money from our jobs. We want passion, fulfillment, and surprise too. We want, in a word, romance.

Organizations take those wishes seriously, and do their best to win our hearts. They no longer attract talent with only the promise of material reward. Their recruitment pitches promise that you will find meaning. You will grow. You will be part of a community, and you will help change the world. If you are lucky, you might even get paid well. What’s not to love?

Scholars have spent decades studying what makes organizations win our hearts. It’s called identification. We fall for organizations that reward our efforts not only with good benefit packages, but also with a better version of our selves.

When we are “identified,” we become what we do. We come to think of our selves in ways that incorporate — literally, give our body to — the organization’s values. If my organization is open, rigorous, and entrepreneurial, I must be too. When our organization shines, then, we feel as if we shine. When it struggles, we struggle. Our jobs appear, like other romances, the healthiest and most sensible of addictions.

No wonder we can’t stop thinking about our jobs, and sometimes they make us lose our mind. That is just how romance works. It is demanding. It might consume you. But when it’s good, it makes you feel alive. While it lasts, that is.

I often meet people falling out with a job or an organization that they (used to) love. They often turn to executive courses as a couple’s therapy of sorts, looking for help sorting out their mixed feelings. I understand them well because I am one of them some days. I know the hesitation, the mild guilt, the fear. Am I just being impatient? Will I get over it? Will I find something better, or even just as good? And who will I become if I leave?

Sometimes those questions are signs that we are stuck in a dysfunctional romance with our jobs. Other times, that a fading romance with our job is transforming into a mature love with our work. Most often, it is a bit of both, but it is crucial to tell them apart. You must understand why you are leaving before you can think about how to leave well.

This is how to tell if you are in a dysfunctional romance. You give a lot, you don’t get what you need, and you are made to feel that it is your fault. Breaking up feels hard, even if abuse is involved. You feel captive, for economic and psychological reasons. You want to leave but feel that you can’t afford it and, to be honest, can’t even imagine it. Who would you be?

This is how to tell if your romance is transforming into enduring love. Your passion is turning into devotion, and you begin to discern what exactly is worth being devoted to. You are not sure if it is worth being devoted to a job. For all you might love it, a job will never love you back. But you love what you do, and who you have become, in that job. You love the work, and the people you touch through that work. Those deserve your devotion.

If you conclude that you’re in a dysfunctional romance, there is only one thing to do to leave well. Get out as soon as you can. Find what you need to support yourself — another job, a good group of friends — and make a clean cut. It will heal quicker than you can imagine. Even if only parts of your job are like that, draw a clear line between you and those. Once you realize that you are better off, it will free you up. Perhaps, even, to stay on different terms.

If you already have alternatives — an attractive offer, enough support around you — and you are still hesitating, however, you need to take a different tack. You may be shifting your love from your job to your work, and you need to honor the former and embrace the latter. So think twice before you leave. Once about what you need to let go of, and once about what you cannot leave behind. Then make sure you mourn the former, and take the latter with you.

Leaving a job that has made you who you are — even if it has shrunk, you have outgrown it, or both — cannot be quick and easy, and you should not try to make it so. It would be an insult, and a waste of learning. Take time to say goodbye to people and spaces, even to things. Acknowledge the last time you do a task, attend the all-hands meeting, or look out a certain window. If there is a party, make it full of stories. Let sadness be there alongside celebration. When people congratulate you, let them know that condolences might be in order. Feeling sad might make you wonder if you are making a mistake. It could be; you must consider that. But maybe it just means that you have been doing it right all along.

Let your job teach you one last thing: to savor loss. You will need it again. In the mobile workplace of our day and age, being able to move on is as important as being able to commit. We hardly seem talented if we can’t do both. It’s not enough to be able to love our jobs, then. We must also learn to leave them. And if loving well is hard, leaving well is harder still.

While you say your heartfelt goodbyes, remember that when you leave a beloved job there is no need to pack light. Take all you can with you, lest you leave yourself behind. Pay attention to the work that you will continue to do, even elsewhere, and make a mental note of how it might develop now that your job is no longer constraining it. Let the people you want to keep in your working life know that your relationship goes on, and might even develop in new ways. If you already know what those ways might be, it will make both you and them feel good to say it out loud. If you are the kind of person who enjoys making lists, by all means make one of the work and the people you are committed to taking with you.

Finally, turn to the organization. You might have chosen to leave it, but you can still keep the habits and values that you learned there. That is the beauty of identification — you do not have to give it back like your laptop and badge. Many people cherish their time at organizations that they left long ago, and remain loyal to them, because those places helped them discover who they were, what they could do, and where they could go next. Jennifer Petriglieri and I have coined the term “identity workspaces” for those organizations. The mobile talent of our day and age finds them attractive precisely because they make us feel portable. They stay with us long after we are gone.

Sometimes it is necessary to leave a job or an organization in order to love our work better. Because there is one thing that loving well requires that no job or organization can ever teach — the capacity to be alone. Once we can do that, love is no longer a necessity but a joy. We are more likely to set firm boundaries, which make it easier to get close to others and to our work without giving ourselves away. When we can be alone, we become less vulnerable to exploitation and abuse. We can really commit, because we are not captive.

I don’t think it’s worth loving a job, or an organization. Let me repeat it: they will not love you back. But if a job, or an organization, helps you find work and people worth loving, then it has been good, and it is worth honoring, both while you are there and after you are gone.

Communicating Your Succession Plan with Customers, Clients, and Shareholders

Wed, 11/14/2018 - 18:00
YASUYOSHI CHIBA/Getty Images

“When are you thinking of retiring?” I am used to this question by now.  It usually comes up an hour into a meeting with a client prospect for our investment company, often after a shuffling of papers and downward glances. “And what is your plan for succession at the company?”

At first, I used to be surprised. Did I look that old? I’d reply that I had no near-term plans to retire and that we had a very strong team of younger executives, including the current president, whom I had designated as my eventual CEO replacement. Then I cycled through a range of reactions: annoyance with the inquiry; concern that women are still not considered as “committed” as men, even when we’re CEO; and wanting to better understand why people felt compelled to ask me about retirement.

It turns out that I am not the only one who’s wondered about this. I informally surveyed 280 business leaders, all over 55 years old, the majority of whom work for small to mid-sized firms in the U.S. I found that 30% had been asked about retirement, primarily by clients or prospects.  Both men and women were queried about retirement, generally starting by age 60, across all industry groups. Many said they believed the question was seeking reassurance.

The fact is that CEOs tend to be the face of their organizations, especially at small to mid-sized companies, where they may work with the most important clients, and when they are the founder. Prospects may have been drawn to the company specifically because they heard about the CEO. So it is entirely reasonable that customers planning their future with you would want to know about any upcoming retirement plans.

CEOs have to anticipate this concern and be proactive in addressing it. The growth of your business may depend on how well you can ensure clients that the company will be fine under your successor’s leadership. The further away you are from retirement, the longer you can handle that client’s needs; but the closer you are to departure, the more you need to convince them that your colleagues are as good, if not better, than you. (And if you’re nowhere near retirement, you should simply state that you love your job, have numerous initiatives underway, and look forward to fulfilling them in collaboration with colleagues and clients.)

Failing to communicate succession plans clearly with clients, workforce, and shareholders can result in internal chaos, loss of current and future business, and decline in stock value. As CEO, it’s your duty to be mindful about client concerns and carefully consider your tenure, transfer of responsibility, retirement timing, and appropriate communication. Failing to do this may put your firm and your ultimate successor at risk.

Here’s an action plan that may help:

If you are the CEO of a small to mid-sized company, you need to begin thinking about your own transition many years before retirement.  That includes deciding when you will retire and at what pace you will divest your current responsibilities.

From there, you can decide whom to move tasks to, whether you have the right people in place, and, if not, how to attract and train the next generation of leaders.  Only at that point can you begin to implement these reassignments.

With this plan in place, you’ll have a more thorough response to any questions about when you will retire and who will succeed you. When it comes to timeline, you can always offer a range (4-6 years from now, for example) or explain that you intend to be fully active for many more years than that.

What clients want to hear next is reassurance about the team you have in place to take on more of your responsibilities. Reinforce how much confidence you have in your people. Within a year of your retirement, introduce your core team to prospects and clients, and highlight their achievements with the firm. Many CEOs prefer gradual transitions, and this requires thoughtfully explaining which roles you will retain for the longest period of time. That way, your team fully understands and can articulate these plans to others. Since more than one person may be in contention for the CEO role, try to clarify that choice as soon as possible, to avoid internal stress and bitterness.

Client prospects care when you’re going to retire.  That’s a nod to your reputation. But it requires a careful and honest description of both how long you can provide your expertise and how well you have assembled, led, and nurtured a management team with even better skills than you could offer. You don’t have to wait for the question to come up before speaking to this.

Uber Prepares to Go Public, and China’s Social Credit System

Wed, 11/14/2018 - 17:00

Youngme Moon, Mihir Desai, and Felix Oberholzer-Gee discuss how much Uber is worth as it prepares to go public, before debating China’s controversial Social Credit system. They also share their After Hours picks for the week.

Download this podcast

You can email your comments and ideas for future episodes to: harvardafterhours@gmail.com.

HBR Presents is a network of podcasts curated by HBR editors, bringing you the best business ideas from the leading minds in management. The views and opinions expressed are solely those of the authors and do not necessarily reflect the official policy or position of Harvard Business Review or its affiliates.

Convincing CEOs to Make Harassment Prevention a Priority

Wed, 11/14/2018 - 17:00
Caspar Benson/Getty Images

It has been a year since the #MeToo movement went viral. Since then, the Equal Employment Opportunity Commission (EEOC) has experienced a 13.6% increase in the number of sexual harassment charges it has received. The EEOC’s counterpart state agencies have seen even greater increases. While some business leaders have seized this moment to make important changes in how they address harassment in their workplaces, others do not yet see the urgency in addressing the problem. In fact, in a meeting we had last month with a group of senior HR directors, some of the most urgent questions were: “How do I make my CEO pay attention to this issue?” and “How do I convince my CEO that we need to invest sufficient resources in preventing harassment?”

In June 2016, the EEOC issued a first-of-its-kind report on harassment in the workplace. The suggestions and tips in that report still stand, but the past year has shown us just how difficult it is for HR directors, general counsel, compliance officers, and D&I directors to make the business case for harassment prevention to their leadership. Many of the people in these roles know—as we do—that stopping and preventing workplace harassment is not only a moral imperative, it is also sound corporate strategy.

In the past fiscal year the filing of sexual harassment cases by the EEOC more than doubled, and monetary damages paid by employers increased from $47 million to $70 million in EEOC cases. These statistics do not include the costs of sexual harassment cases brought by private plaintiff attorneys or other forms of harassment investigated or litigated by the EEOC or private attorneys, such as harassment as a result of race, national origin, religion, disability, or age. Adding the costs of these cases further increases the financial liability for companies that fail to prevent harassment.

Damage awards and litigation costs are not the only financial consequences of corporate failure to stop and prevent workplace harassment, though. Employees who are harassed, as well as those who work with harassed employees, suffer adverse physical and mental health consequences, resulting in absenteeism and higher medical costs. Harassment reduces the productivity of both harassed employees and the unit in which the harassment occurs. Harassed employees may leave if they are able to, and employees who witness unchecked harassment may also leave. Because almost 70% of harassment incidents are never reported to the employer, talented and highly-skilled employees may leave without employers knowing that their business has suffered as a result of workplace harassment.

Reputational harm can also be devastating to an employer’s business. Companies in which it is known (even without media coverage) that harassment occurs in their workplaces are less likely to attract talented employees and may lose customers and clients. If workplace harassment becomes public, the harm to the company’s reputation may be significant and long lasting.

For example, numerous companies — from Wynn Resorts to Fox News to Mike Isabella’s restaurant conglomerate to Uber — have seen stock prices, advertising revenue, sales numbers, and consumer loyalty fall as a result of negative harassment-related publicity. Boards of directors have faced shareholder derivative suits for failing to investigate and correct allegations of harassment. Some businesses, like Fidelity, have taken critical steps to correct and prevent harassment as soon as they have learned about it. Our hope is that other organizations and companies will begin to take proactive steps, before they find themselves in the press.

Unfortunately, as we heard at the HR meeting, many employers have still failed to implement the best and most effective measures to prevent workplace harassment. Traditional training that is focused on legal definitions and prohibitions of unlawful conduct is necessary but insufficient to prevent large judgments against a company and to prevent future misconduct. Written policies are often overly legalistic, not disseminated effectively, and poorly implemented. Typical corporate reporting and investigative policies and procedures lack crucial components that would make them most effective. Harassers, especially “superstars” within an organization, are often protected rather than punished, and individuals who report the misconduct of those employees may suffer unlawful retaliation. As a result, employees may be afraid to come forward and corporate leaders are unaware of the full extent of harassment in their workplaces.

To stop harassment effectively and to prevent its recurrence, employers need to create a culture of respect and inclusivity, where people feel safe when reporting misconduct, and where there are clear and immediate consequences for having engaged in harassment. Managers need to be taught skills regarding how to respond to harassing behavior in its infancy, before it rises to the level of illegal conduct, and how to respond when an employee makes a complaint. Non-supervisory employees need to be told what behavior is unacceptable in the workplace, and they must be taught skills on how to intervene when they observe harassing behavior. Leaders need to clearly and repeatedly set forth their values and expectations and hold people accountable when they contravene those expectations.

In its report, the EEOC issued a roadmap for such a proactive harassment prevention program. Sixteen months — and thousands of sexual harassment claims later — it’s clear how desperately such a roadmap is needed. Walking down this road will not just keep employees safe. It will also help businesses avoid the financial and reputational damage that comes with ignoring harassment prevention.

How Our Careers Affect Our Children

Wed, 11/14/2018 - 16:00
Mark Edward Harris/Getty Images

What working parent hasn’t felt guilty about missing soccer games and piano recitals? When there are last-minute schedule changes at work or required travel to a client site, it’s normal to worry that you’re somehow permanently scarring your little one.

But how does our work affect our children’s lives?  About two decades ago, in a study that surveyed approximately 900 business professionals ranging from 25 to 63 years old, across an array of industries, Drexel University’s Jeff Greenhaus and I explored the relationship between work and family life and described how these two aspects of life are both allies and enemies.  In light of the deservedly increased attention we’re now paying to mental health problems in our society, it’s worth taking a fresh look at some of our findings on how the emotional lives of children — the unseen stakeholders at work — are affected by their parents’ careers.  Our findings help explain what’s been observed since our original research about how children are negatively affected by their parents being digitally distracted, also known as “technoference,” and by the harmful effects of stress at work on family life.

Most of the research on the impact of parental employment on children looks at whether or not mothers work (but not, until very recently, fathers); whether parents work full- or part-time; the amount of time parents spend at work; and the timing of parental employment in the span of children’s lives. Our research went beyond matters of time, however, and looked, in addition, at the inner experience of work: parental values about the importance of career and family, the psychological interference of work on family life (that is, we are thinking about work when we are physically present at home with our family), the extent of emotional involvement in career, and discretion and control about the conditions of work.

All these aspects of parents’ careers, we found, correlate with the degree to which children display behavior problems, which are key indicators of their mental health.  We measured them with the Child Behavior Checklist, a standard in the child development research literature that has not been used in other research in organizational psychology. Unfortunately, to date, the specific effects of parents’ work experiences (not time spent at work) on children’s mental health has still not been a priority for research in this field.  It should be, for this is yet another means by which work can have important health consequences. Here are some of the highlights of what we observed.

For both mothers and fathers, we found that children’s emotional health was higher when parents believed that family should come first, regardless of the amount of time they spent working. We also found children were better off when parents cared about work as a source of challenge, creativity, and enjoyment, again, without regard to the time spent.  And, not surprisingly, we saw that children were better off when parents were able to be physically available to them.

Children were more likely to show behavioral problems if their fathers were overly involved psychologically in their careers, whether or not they worked long hours. And a father’s cognitive interference of work on family and relaxation time — that is, a father’s psychological availability, or presence, which is noticeably absent when he is on his digital device — was also linked with children having emotional and behavioral problems. On the other hand, to the extent that a father was performing well in and feeling satisfied with his job, his children were likely to demonstrate relatively few behavior problems, again, independent of how long he was working.

For mothers, on the other hand, having authority and discretion at work was associated with mentally healthier children. That is, we found that children benefit if their mothers have control over what happens to them when they are working.  Further, mothers spending time on themselves — on relaxation and self-care — and not so much on housework, was associated with positive outcomes for children. It’s not just a matter of mothers being at home versus at work, it’s what they do when they’re at home with their non-work time. If mothers were not with their children so they could take care of themselves, there was no ill effect on their children.  But to the extent that mothers were engaged in housework, children were more likely to be beset by behavior problems.

Traditional roles for fathers and mothers are surely changing since we conducted this research. But it’s still the case that women carry more of the psychological burden of parental responsibilities. Our research showed that taking time to care for themselves instead of on the additional labor of housework strengthens mothers’ capacities to care their children. And fathers are better able to provide healthy experiences for their children when they are psychologically present with them and when their sense of competence and their well-being are enhanced by their work.

The good news in this research is that these features of a parent’s working life are, at least to some degree, under their control and can be changed.   We were surprised to see in our study that parents’ time spent working and on child care — variables often much harder to do anything about, in light of economic and industry conditions — did not influence children’s mental health. So, if we care about how our careers are affecting our children’s mental health, we can and should focus on the value we place on our careers and experiment with creative ways to be available, physically and psychologically, to our children, though not necessarily in more hours with them. Quality time is real.

Research: Whistleblowers Are a Sign of Healthy Companies

Wed, 11/14/2018 - 15:05
Barbara Chase/Getty Images

Some of the worst corporate disasters of the past two decades were heralded by whistleblowers: Sherron Watkins raised the red flag internally at Enron, Cynthia Cooper let management know of major accounting problems at WorldCom, and Matthew Lee brought problems to his management team at Lehman Brothers. The whistleblowers weren’t able to halt their companies’ declines and—in some cases—faced punishment for calling attention to internal misdeeds. Looking at these examples, it would be easy to say that whistleblowers have little impact on how companies both conduct themselves and weather corporate storms. But that’s not the case.

In 2018, NAVEX Global, the leading provider of whistleblower hotline and incident management systems, provided us secure, anonymized access to more than 1.2 million records of internal reports made by employees of public U.S. companies. Our analysis revealed that whistleblowers—and large numbers of them—are crucial to keeping firms healthy and that functioning internal hotlines are of paramount importance to business goals including profitability. The more employees use internal whistleblowing hotlines, the less lawsuits companies face, and the less money firms pay out in settlements.

Our conclusions are in many ways counterintuitive to how many executives manage complaints. Many companies continue to ignore—or misuse—whistleblower hotlines, and most don’t know what make of the information that is provided through them. Even when firms want to support whistleblowers, managers don’t know what to make of reported level of internal reports. Are more internal reports of problems a signal of widespread troubles within the firm? Research on external whistleblowing events, by Robert Bowen, Andrew Call, and Shiva Rajgopal finds that more external reporting events is associated with increased future lawsuits and negative performance. Does this finding on external reporting hold true for internal reporting events? Or do more reports instead reflect employees’ trust in management and a communication channel that allows management to more effectively prevent public disasters before they occur?

More whistles blown are a sign of health, not illness  

We found that firms actively using their internal reporting systems face fewer material lawsuits and have lower settlement amounts than firms ignoring—or minimally using—similar information. While all firms are likely to have some frequency of issues, firms where these are reported early are more likely to address them before they become larger problems resulting in costly litigation.

We measured activity from the perspectives of employees and managers, assessing both the number of internal reports filed and the amount of information provided in each report. We also measured the number of times reports were accessed and reviewed by management. We found that a one standard deviation increase in the use of an internal reporting system is associated with 6.9% fewer pending lawsuits and 20.4% less in aggregate settlement amounts.

We also found that higher use of internal reporting systems is not associated with a greater volume of external reports to regulatory agencies or other authorities. This suggests that a higher volume of internal reports does not imply that problems at the company are more frequent or severe. Instead, internal reports indicate open communication channels between employees and management and a belief that issues raised will be addressed. At the same time, when employees do report externally, it reflects management’s failure to address issues internally.

Types of firms that actively use internal whistleblower hotlines

While the use of internal reporting systems, proxied by the number of reports filed, has increased over time, how those systems are used varies substantially across firms and industries.

What types of companies are actively using internal reporting systems? We saw a few common characteristics in our research. Using an index developed by Lucian Bebchuk, Alma Cohen, and Allen Ferrell in 2009, we found that firms with more powerful management—e.g., firms with governance protocols that limit shareholder power relative to firm leadership—are less likely to actively use their internal reporting systems. Fast-growing companies are also less likely to use their internal reporting systems, as are firms that show signs of potential earnings misstatements. Firms that are more active in using their systems tend to be more profitable (as measured by return on assets) than firms that are less active users of their systems.

We found that companies that more actively use their internal reporting systems can identify and address problems internally before litigation becomes likely. Significantly, our analysis shows that a one-standard-deviation increase in the use of an internal reporting system is associated with 3.9% fewer pending material lawsuits in the subsequent year and 8.9% lower aggregate legal settlement amounts. Over a three-year period, a one standard deviation increase was associated with 6.9% fewer lawsuits and 20.4% lower settlement amounts. Avoiding lawsuits is important for reasons beyond just the direct financial costs of legal defense and settlements. Although settlement costs can often be in the hundreds of millions of dollars, the hit to brand reputation and stock price can easily exceed all other out-of-pocket expenses. We found that in addition to reduced legal exposure, firms that more actively use their internal reporting systems are typically more profitable and have been in business longer.

What this means

In our discussions with compliance officers at firms, many executive leadership teams stated a “goal” to have zero reports. This is not hard to accomplish if you simply don’t make your employees aware of the system or comfortable using it. There is evidence that this is often the case: In 2014, Bruckhaus Deringer found that nearly 30% of managers in their survey reported that their company actively discourages whistleblowing.

Other executives seem to understand that having few or no reports signals a poorly used system, but they also seem to think that going beyond the industry average number reports is a sign that the firm has more problems than they should.

Our research provides strong evidence that neither of these assertions are true: high usage is more often a sign of a healthy culture of open communication between employees and management than a harbinger of real trouble. After all, all large organizations face a large amount of common, unavoidable, and unobserved problems. Internal reporting systems simply make those problems visible to management.

Managers should view hotlines as a critical component of traditional audit mechanisms and board of director meetings. The reports seem to be a valuable resource to identify and quickly address concerns arising within the firm. And regulators are on the hook, too. Given what we learned about how companies with strong internal reporting systems fair, regulators might rethink the recent prioritization of external over internal whistleblowing and provide greater incentives for companies to implement their own effective solutions.

Why Management History Needs to Reckon with Slavery

Wed, 11/14/2018 - 00:48

Caitlin Rosenthal, assistant professor of history at UC Berkeley, argues there are strong parallels between the accounting practices used by slaveholders and modern business practices. While we know slavery’s economic impact on the United States, Rosenthal says we need to look closer at the details — down to accounting ledgers – to truly understand what abolitionists and slaves were up against, and how those practices still influence business and management today. She’s the author of the book, Accounting for Slavery: Masters and Management.

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What Stan Lee Knew About Managing Creative People

Tue, 11/13/2018 - 22:20
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Stan Lee hated to see an idle artist. The renowned comic book writer and publisher, who died this week at 95, thought idle talent was bored talent, and bored talent was easy to lose to the competition. It also personally bothered him that the people in his employ might be scrambling to earn enough money.  So Stan made sure to provide continuous employment, sometimes to the detriment of the company.

In one famous anecdote, Stan doled out more assignments than the company needed—and didn’t bother to tell boss Martin Goodman about the extraneous inventory. He stuffed the extra comic books into a closet, intending to use them when the time was right.  When Goodman saw the closet, he ordered Lee to fire everyone in the bullpen. Lee followed his boss’s orders. But he still felt it was a mistake—he needed to assign the extra stories, he argued, in order to invest in his people.

I studied Lee for my book, Superbosses. As I explained in HBR, a superboss isn’t just a really good boss. They don’t just build an organization or surpass a revenue target; they identify, train, and build a new pipeline of talent. The way Jon Stewart’s Daily Show launched the careers new comedians, or Alice Waters launched the careers of new chefs. Through spotting, nurturing, and developing talent, superbosses — like comic book superheroes — have an outsized impact.

Keep talent busy was just one of the lessons I took from Lee’s example. A second, but equally important lesson, was don’t censor talent. Lee preferred to let his talent sort out the creative details. He remembered working on a comic strip that used the word pogo stick in the punch line. The editor felt that pogo stick wouldn’t resonate with rural audiences, and he instructed Lee to change the gag so that the punch line had the word roller skates instead. It deflated the joke, but Lee changed it anyway. The strip was eventually dropped, and Lee said, “this type of censorship, to me, is almost indecent.” When you hire an artist to do a job, you let them do the job. Lee elaborated, “It seems to me that if a person is doing something creatively, and he feels that’s the way it ought to be done, you’ve gotta let him do it.”

Lee put his words into action years later when the Hulk, a Marvel franchise, became the subject of a popular primetime television show. He was amazed to see how the creative team transformed the Hulk for this new medium, and he was glad to stay out of their way. “I learned a helluva lot about TV from Ken Johnson during the many discussions we had about how to best adapt The Incredible Hulk to television. The success of that show, under Ken’s direction, proves beyond any doubt how important it is to put creative projects in the hands of truly creative people.” Lee enjoyed being fairly hands off as a boss, and extended that courtesy even to younger staffers, who more-traditional bosses might have said were too green.

A third lesson I took from Lee’s example: give credit where it’s due. It sounds so straightforward, but in reality, it’s very rare. One way Lee gave credit was by creating a credits page, written in a chatty tone. The credits page was unique in comics; up until then the artists drawing and inking the panels had remained anonymous. The credits might read something like this: “Written with Passion by Stan Lee. Drawn with Pride by Jack Kirby. Inked with Perfection by Joe Sinnott. And lettered with a Scratchy Pen by Artie Simek.”  He also talked about the staff frequently in his monthly newsletter The Bullpen Bulletin.  These shout-outs occasionally changed or shaped the careers of the people in his department. For instance, in the middle of his career, artist Jack Kirby was nicknamed the “King of Comics” by Stan Lee, and Stan reported that he was the “artists’ artist.”  To this day, Kirby is known as the King of Comics, or “King Kirby.” This kind of publicity was not only good for the artists, but made it possible for a young reader to become particularly devoted to their favorite artist. It branded certain artists as Marvel artists, enabled readers to feel another level of intimacy with the product, and allowed Lee to promote the careers and further the professionalization of the field, another passion of Lee’s.

Finally, Stan Lee’s example is a reminder to dream big. There’s no better way to motivate the best people. “We’re trying to elevate the medium,” he once said. “We’re trying to make [comics] as respectable as possible.” Lee felt that comic books had the power to make important social commentary, to be incisive and satirical and smart. He believed that a day would come when an intelligent adult wouldn’t be embarrassed to be seen walking down the street with a comic strip, and he constantly pushed toward that goal. He suggested that comics should be studied at the college level, saying, “If people are going to study movies, TV, opera, ballet, concert, sculpture, painting, and other media, they might as well study comic books because comic books are just as profound and strong a factor in shaping, and moving, and molding people’s thoughts.”  He argued there was no reason comics shouldn’t be seen as viable art. That attitude drew the best artists to want to work with him.

Lee wasn’t perfect—no person is. Ultimately, he repositioned comics, professionalized the industry, and launched the careers of dozens of proteges. It’s a legacy any boss would call super.

Why It’s Easier to Make Decisions for Someone Else

Tue, 11/13/2018 - 18:00
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Why is it easier to see the best solution to other people’s dilemmas than our own? Whether it’s about someone deciding to pursue a new job, or ask for a raise, or someone simply mulling over which ice cream flavor to choose, we seem to see the best solution with a clarity and decisiveness that is often absent when we face our own quandaries.

People have a different mindset when choosing for others: an adventurous mindset that stands in contrast to the more cautious mindset that rears when people make their own choices. In my research with Yi Liu and Yongfang Liu of East China Normal University in China and Jiangli Jiao of Xinjiang Normal University in China, we looked at how people make decisions for themselves and for others. We were interested in the process and quantity of information a decision maker uses when choosing for others versus choosing for the self. We wanted to know: Is more information searched in the process when people choose for others versus for themselves, and does the way they evaluate that information change based on whom they are choosing for?

To test our hypotheses, we performed eight studies with over a thousand participants. Throughout the series of randomized tests, participants were given a list of restaurants, or job options, or dating profiles — each with detailed information and then participants were asked to make choices for themselves or for someone else based on that information.

What we found was two-fold: Not only did participants choose differently when it was for themselves rather than for someone else, but the way they chose was different. When choosing for themselves, participants focused more on a granular level, zeroing in on the minutiae, something we described in our research as a cautious mindset. Employing a cautious mindset when making a choice means being more reserved, deliberate, and risk averse. Rather than exploring and collecting a plethora of options, the cautious mindset prefers to consider a few at a time on a deeper level, examining a cross-section of the larger whole.

But when it came to deciding for others, study participants looked more at the array of options and focused on their overall impression. They were bolder, operating from what we called an adventurous mindset. An adventurous mindset prioritizes novelty over a deeper dive into what those options actually consist of; the availability of numerous choices is more appealing than their viability. Simply put, they preferred and examined more information before making a choice, and as my previous research has shown, they recommended their choice to others with more gusto.

These findings align with my earlier work with Kyle Emich of University of Delaware on how people are more creative on behalf of others. When we are brainstorming ideas to other people’s problems, we’re inspired; we have a free flow of ideas to spread out on the table without judgment, second-guessing, or overthinking.

Upon reflection, these results should feel familiar. Think about the most recent time you asked for a raise. Many people are initially afraid to ask (employing a cautious mindset); however, these same people are often very supportive in recommending to others (such as their friends or colleagues) that they ask (employing an adventurous mindset). When people recommend what others should do, they come up with ideas and choices and solutions that are more optimistic and action-oriented, focus on more positive information and imagine more favorable consequences. Meanwhile, when making their own choices, people tend to envision everything that could go wrong, leading to doubt and second-guesses.

How can this research be applied? First, we believe that it suggests that everyone should have a mentor, or a blunt friend who can help people see and act on better evidence.

We should also work to distance ourselves from our own problems by adopting a fly-on-the-wall perspective. In this mindset, we can act as our own advisors—indeed, it may even be effective to refer to yourself in the third-person when considering an important decision as though you’re addressing someone else. Instead of asking yourself, “what should I do?” ask yourself “what should you do?”.

Another distancing technique is to pretend that your decision is someone else’s and visualize it from his or her perspective. This can be very easy when thinking of famous exemplars, such as how Steve Jobs would make your decision. By imagining how someone else would tackle your problem, people may unwittingly help themselves.

Perhaps the easiest solution is to let others make our decisions for us. By outsourcing our choices, we can take advantage of a growing market of firms and apps that make it increasingly easier for people to “pitch” their decisions to others. For example, people can have their clothes, food, books, or home decor options chosen for them by others.

Our research underscores a basic human desire: we want to feel like we’ve made a difference. We are wired for connection with others and an interesting part of making decisions for other people is that it is possible to have a bigger impact. Since managers and leaders are tasked with making decisions for others on multiple levels—everything from daily minutiae to personnel conflicts to long-term strategic planning—our results point the way to helping these employees find greater degrees of creativity, effectiveness, and fulfillment in their work.

Containing the Latest Ebola Outbreak

Tue, 11/13/2018 - 17:00
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Last month, a rebel attack in Beni, the epicenter of the ongoing Ebola outbreak near the eastern border of the Democratic Republic of Congo (DRC), once again halted the efforts of response teams working to contain the virus. With over 10 major episodes of violence since the outbreak was declared in August, insecurity and community mistrust has made it difficult to gauge the true extent of Ebola’s spread. Though the outbreak could still be limited, cases appear to be increasing — especially in Beni, where cases have doubled in recent weeks — with 80% of new infections arising among people with no link to “known transmission chains” (where everyone who is infected is known and you can track who has been exposed with some accuracy). This means that we might only be seeing the tip of an iceberg of hidden transmissions and the outbreak could spiral out of control and spread into neighboring countries. Given this danger, the current strategy for containing the disease needs to be adjusted.

Eastern DRC has been home to one of the deadliest and most intractable conflicts in modern history; over 50 armed groups are still active in the region. Originally formed to protect their communities, many of these rebel militias have become entangled in the messy web of politics, shifting allegiances, and underhanded mining deals that fuel the conflict.

This backdrop and the inability of the government or international agencies to assure basic safety, much less basic needs, has entrenched a distrust of formal institutions in the population. These dynamics have been made more complicated by the fact that DRC is supposed to hold elections in December that have already been delayed twice since 2016.

Given that outbreaks can grow quickly and exponentially, definitive action is needed now.

The current plan for stopping this outbreak is based on contact tracing (the identification and monitoring of people who were exposed to Ebola-infected individuals for the 21 days during which they may develop infection) and “ring” vaccination (immunizing these contacts and those close to them with an experimental Ebola vaccine). This approach efficiently contained an Ebola outbreak in western DRC just a few months ago but requires a comprehensive and precise understanding of who is infected and who their contacts are — something that necessitates having unimpeded daily access to their communities for months.

That has not been possible this time around: Areas affected by violence have been inaccessible for days at a time. Therefore, while contact tracing and ring vaccination should continue where transmissions can be tracked, mass vaccination of larger portions of populations should be considered in areas where that is not possible such as Beni, which has a population of about 230,000. Expanding vaccinations in this manner could immediately halt the spread of the disease.

While such a mass vaccination sounds ambitious, the World Health Organization (WHO) and others have executed much larger national campaigns  in over 40 low-income countries, including DRC, where millions of children were immunized against polio or measles within a single week. These campaigns were also implemented successfully during conflicts in Somalia, Afghanistan, and Liberia. Though a mass-vaccination effort targets an entire population, it need only reach the proportion required for “herd immunity” — immunizing enough people so that the virus cannot spread. Early studies of the Ebola vaccine found that it might be possible to achieve herd immunity by vaccinating as little as 42% of the population.

To be successful, the mass vaccination effort would require the buy-in of the communities and the Ebola response teams being able to securely access the areas in question for the day or two it would take to immunize everyone. Promisingly, a recent study showed that even communities with high levels of distrust appear to be open to vaccination.

Anthropologists are already on the ground working tirelessly to engage community leaders and armed groups. In areas not amenable to outreach, a neutral “white helmet” security force, ideally drawn from the African Union or other countries without past involvement in the DRC conflict, should be deployed with the sole mission of securing vaccination efforts. It should be made abundantly clear to the population that this force has no allegiance to any political or institutional actors and is there only to deter violence against responders. At the end of the day, communities and militias do not want their loved ones to die from Ebola and would respect such a presence if they were reassured its mission is strictly medical.

Mass vaccination will also require an adequate supply of the Ebola vaccine. Its manufacturer, Merck, has committed to maintaining a supply of 300,000 doses at all times. Doing so could become difficult if vaccination efforts are expanded, but at the current juncture, the number of people who would need to be vaccinated in order to stunt the outbreak still appears to be within the range of existing stockpiles. Nonetheless, production of the vaccine should be increased and the bottlenecks to doing so should be assessed and cleared to ensure an adequate supply.

It’s true that the Ebola vaccine is still experimental and its health risks are not yet fully known. However, for people living in areas where everyone who is infected is not known, the heightened risk of unknowingly contracting a fatal Ebola infection may, at this point, outweigh the potential danger posed by the vaccine.

After the West African Ebola epidemic spiraled out of control, many wondered why more aggressive measures were not taken sooner. We may be at a similar make-or-break point in this outbreak.

How We Help Employees Pay Down Student Loans and Save for Retirement at the Same Time

Tue, 11/13/2018 - 16:00
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A small percentage of U.S. companies — including PwC, Fidelity, and Aetna — have stepped up to help their employees cope with the education loans weighing them down by offering them cash to help them reduce their debts. While I applaud them, one downside of their approach is simply giving their workers cash raises their income taxes, diminishing the impact of their efforts.

To address this dilemma, Abbott, where I lead Human Resources, took a different approach. We introduced a program last August to contribute 5% of pay to a tax-deferred 401(k) plan for full- and part-time workers who direct at least 2% of their pay toward paying down their student loans. The Internal Revenue Service reviewed — and ruled favorably on — the 401(k) plan structure we came up with to make this possible.

In addition to the tax issue, our program — called Freedom 2 Save — helps tackle another problem: two-thirds of millennials aren’t saving for retirement. For every decade a person delays saving for retirement, the amount he or she ultimately needs to save doubles. Unless they start putting aside money now, many graduates will have to work into their 70s.

Over 10 years, an employee with a starting salary of $70,000 could earn $54,000 in his or her 401(k) account — assuming a 6% annual return and yearly pay increases of 3% — without contributing a dime toward retirement. Thanks to the power of tax-deferred investment returns, that amount could grow to hundreds of thousands of dollars by the time he or she turns 60.

Freedom 2 Save offers Abbott a number of benefits. We believe that it will easily pay for itself by helping us retain employees — a big deal in an era where millennial turnover alone costs businesses more than $30 billion every year. (Ninety percent of young workers say they’d commit to a company for five years if it gave them some loan relief, and workers with student debt stay at their jobs 36% longer if employers help pay off loans.) In addition, it will help take a load off of workers burdened by debt who say the resulting stress negatively impacts their job performance.

Americans are carrying a record $1.5 trillion in student loan debt, a sum that has more than doubled in the past decade and now surpasses our nation’s level of credit card debt. The typical graduate leaves school owing about $40,000. Many face larger burdens. About 2.5 million Americans have debt loads in excess of $100,000.

So far, 400 Abbott employees have signed up for the Freedom 2 Save program. Once it is well-established, we anticipate thousands will take advantage of it.

Although we’re the first company to work with the IRS to structure a program like this, it’s possible that more companies will be able to do something similar with time. (An employer group has asked the IRS commissioner to expand the ruling it gave us to all companies.)

There are no easy or universal solutions to America’s student debt crisis. But as employers, we are in a unique position to come up with innovative benefits that have a tangible positive impact on employees’ lives. By increasing our ability to recruit and retain the best people, such efforts are highly worth it.

5 Ways Smart People Sabotage Their Success

Tue, 11/13/2018 - 15:05
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Mark was always one of the smartest kids in his class. He’s done well in his career, but when he checks Facebook, he sees people he outperformed at school who have now achieved more. Likewise, there are colleagues at his firm who have leapfrogged him. Sometimes he wonders, “What am I doing wrong?”

Sound familiar? You might relate to Mark yourself, or have an employee or loved one who struggles with similar feelings. Raw intelligence is undoubtedly a huge asset, but it isn’t everything. And sometimes, when intellectually gifted people don’t achieve as much as they’d like to, it’s because they’re subtly undermining themselves. If you’re in this situation, the good news is that when you understand these foibles you can turn them around. Here are five I’ve seen smart people particularly struggle with:

1. Smart people sometimes devalue other skills, like relationship building, and over-concentrate on intellect. Very smart people sometimes see their success as inevitable because of their intellect, and don’t see other skills as important. For example, an individual who finds workplace diplomacy difficult might write this off as an irritation rather than as a core skill required for their role. Similarly, they might see it as critical for a secretary to be personable, but not an executive. Therefore they don’t invest time and effort in developing these skills.

These views don’t come out of nowhere. Most people have a natural bias towards wanting to capitalize on their strengths and, conversely, would prefer to avoid thinking about areas in which they’re not naturally as strong. Bright kids typically receive a lot of reinforcement throughout their early lives that their intelligence is valuable. They grow up being told they’re smart, and during their schooling, experience that success comes more easily to them than to others. It’s easy to understand why, as a result, they would continue to focus on their intellect as a adults.

But in most workplaces, you need more than raw intelligence to get ahead. And only focusing on your greatest strength, rather than also addressing your weaknesses, tends to be self-sabotaging.

Solution: Use your strengths to overcome your weaknesses. If you’re good at learning you can simply learn the skills that don’t come as naturally to you. You don’t need a personality makeover, you just need a game plan and a genuinely constructive attitude. For instance, identify three specific workplace diplomacy behaviors that would improve your success in that area. 

2. Teamwork can be frustrating for very smart people. When someone grasps concepts quickly and has high standards for their own performance it can create difficulties when working with others who take longer to process information and pick up concepts. If a person felt held back at school by being in a class with less smart kids, this frustration with teamwork can develop early — you know what this feels like if you routinely did most of the work on group projects, or got scolded for daydreaming during a class that was moving too slowly for you. These feelings can get re-triggered throughout life. When people develop an emotional raw spot as a child, they often have outsized internal reactions when that raw spot is rubbed in their adult life.

Smart people also sometimes find it difficult to delegate because of a sense they can do a task better (regardless of whether this is actually true.)  This is especially likely for those who have a perfectionist streak.

Solution: Be self-compassionate about your internal reactions and understand where they come from, but also learn to genuinely appreciate what diverse minds bring to a team.

3. Smart people often attach a lot of their self-esteem to being smart, which can decrease their resilience and lead to avoidance. If a lot of your self-esteem rests on your intelligence, it can be very difficult to be in situations that reveal chinks in your armor. That might be working with people who are even more skilled or intelligent, or receiving critical feedback, or taking a risk and failing. Any situation that triggers feeling not- smart is experienced as highly threatening. The smart person may even seek to avoid those situations, which ultimately holds the person back.

Solution: Take an objective view of the benefits of working with people who are, in some respects, smarter than you. If you’re surrounding yourself with smart people, you’re doing something right. Remember, iron sharpens iron. Develop relationships with people who you trust to give you help constructive feedback. The more you become accustomed to receiving critical feedback from people who believe in your overall talents and capacities, the easier it will become.

4. Smart people get bored easily. Being smart is not exactly the same as being curious, but if you have both these qualities you might find yourself becoming easily bored with executing the same behaviors over and over. Some types of success stem from creativity, but other types come from becoming an expert in a niche and performing a set of behaviors repeatedly. If you’re smart, curious, and have a love of learning, you might find you quickly lose interest in anything once you’ve figured it out. The execution side of performance might bore you, and you’d rather constantly be learning new things. This can end up being less lucrative than finding a niche and repeating the same formula, but that might seem too boring or unchallenging to you.

Solution: Try taking a 30,000-foot view of when it’s worth tolerating some boredom to collect easy wins when it comes to your overall success. Instead of attempting dramatic change, decide when tolerating short periods (a few minutes or hours) of boredom could have a very beneficial impact on your success. For instance, devoting 5 hours a week to an activity that’s monotonous but lucrative. Additionally, make sure you have enough outlets for your love of learning across the various domains of your life, including your work, hobbies, physical fitness, understanding yourself etc.

5. Smart people sometimes see in-depth thinking and reflection as the solution to every problem. Bright people are accustomed to succeeding through their thinking skills, but can sometimes overlook when a different approach would be more beneficial. For example, the smart person might attack every situation by trying to think it to death (over-researching every decision and ruminating over every mistake) when other approaches would be more fruitful.

Solution: Notice when thinking becomes an unhealthy obsession. Consider when strategies other than thinking are more likely to result in success. Experiment with taking breaks to get unstuck, and allow yourself to learn by doing rather than through exhaustive advance research. Expand your range of skills for reaching insights so that you’re not the person who sees every problem as a nail because their only tool is a hammer. Finally, whenever you find yourself ruminating (doing negatively toned overthinking), disrupt it by doing a few minutes of an absorbing activity (such as a puzzle). This can be a surprisingly effective strategy for breaking out of negative thinking.

Which of these five patterns do you identify with the most? Try rank-ordering them. Are there colleagues or other people in your life who seem to fall into these traps? Try to let go of any sense of shame or judgment — it’s not necessary or useful for overcoming these habits. For any of the tendencies you personally relate to, know that even longstanding and deeply psychological patterns can be turned around with the targeted, practical, problem-solving approach I’ve outlined here.

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